How Instant's earned wage platform could help with employee recruitment, retention

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Bimonthly paychecks could become a thing of the past, some financial technology investors say.

Earned wage access, or receiving all or some of your paycheck directly after your shift, is gaining popularity among employers as a differentiating tool to recruit and retain employees during the national labor shortage.  

Instant, an Atlanta startup that enables companies to pay employees directly after their shifts, grew its customers by 33% in the first half of the year. Instant allows employees to access their wages with no fees, a critique for other earned wage access companies.  

Companies can load wages onto a card for employees, and Instant gets revenue from the card transactions.  

Instant claims their more than 300 customers see a 27% reduction in turnover, according to an Aug. 17 company data report. Founded in 2015, Instant has about $37 million in investments and backing from Atlanta financial technology investment firm TTV Capital and local payment giant InComm Payments. 

The adoption of this new payroll process is accelerating, said Adam Brault, senior vice president of financial services at InComm Payments. 

He attributes the growing interest to the now-mainstream gig economy and labor shortage. Gig workers, such as on-demand rideshare or food delivery drivers, choose their hours and get paid after the shift. Those workers are considered independent contractors, so they don’t have benefits from employers. 

The daily pay trend is now reaching other types of work. Instant’s customers tend to be restaurants, retailers and staffing agencies, Instant CEO Tal Clark said. The startup is now starting to expand into manufacturing, logistics and healthcare. 

For TTV Capital partner Sean Banks, daily paychecks reflect a natural technological progression.  

“Getting paid on the 15^th and the 30^th is really an old convention for a pre-digital money system,” Banks said. “Earned wage access is the first step in changing how payroll will be done in the future.” 

As businesses are hurting for workers across the country, enabling earned wage access could give them a competitive advantage in recruitment. Demand for Instant’s platform increased as restaurants and shops opened after the pandemic, Clark said. According to Instant’s data report, its clients also had a 30% increase in job applicants.  

SnapMedTech, parent company of Atlanta nurse staffing startup SnapNurse, has enjoyed massive growth in the past three years, landing on the top of Atlanta Business Chronicle’s 2021 Pacesetter list. CEO Cherie Kloss says much of that growth comes from the startup’s daily paychecks to nurses, who are not gig workers.  

Last year, 20,000 nurses used SnapNurse. Since launching its daily payment platform, it’s grown to 160,000, Kloss said. She built that payment system because of her own experiences as a contractor. Immediate payments caused her to choose some jobs over others. 

But a daily payroll system has the potential to put a strain on the employer, Banks said.  

Employers are accustomed to planning employee pay twice a month, so they may not have the money supply to provide those payments if they’re waiting on deals to finalize, Banks said.  

Most earned wage providers also aren’t doling out the entire shift’s pay every day, Banks said. Instant allows companies to pay employees 50% of their earned wages, according to Clark. 

Clark wants to change that.  

As Instant continues to grow — planning for double the 40 employees in the next year — Clark wants to refine the payment technology to accommodate higher payments and more small businesses.